The Debt Hawk » Banking

High Yield Checking Accounts

Hawk — Mon, 03 May 2010 11:26:53 +0000

Are you looking for the best banking product to earn the most on your money? While long term certificates of deposits are often thought to have the best interest rates for savings, today there are many high yield checking accounts offering much better rates.

With some of the high yield checking accounts being offered by the financial industry at higher yields than most CDs, you need to check them out. Plus, with a checking account you get much better access to your money.

High Interest Checking Account Requirements to Look Out For

To qualify for this high rate of interest, there are generally some requirements set by the banks. Most are forgiving and allow an account holder to fall out and lose the high yield return for a month, but if the requirements are made the next month, they will receive the interest rate that is desired. These are FDIC-insured accounts where your money will be protected no matter the financial situation of the bank you have an account with.

One of the general requirements is a minimum balance. This can be anywhere from $500 to $5000. Before signing up for one of these accounts, makes sure you can afford to let the financial institution hold the minimal amount at all times. Another common requirement is that there will be so many debit card transactions per month. This could be as little as 8 and as great as 20. The last common requirement is that there should be at least one direct deposit made into the account each month.

Most financial institutions expect a good portion of these account holders to fail in the requirements. The default interest rate can be anywhere from 0.0% to 0.50%. The one requirement that most account holders fail on is the number of purchases. To get around this, many account holders make numerous small purchases. This can be time consuming, but worth it if the interest is high enough.

My High Yield Checking Account - ING Direct Checking Account

While ING Direct does not have the highest yield checking account, this is the online checking account that I use. I love my ING Direct accounts due to the ease of creating sub-accounts for savings goals.

One common high yield checking account feature is a tiered interest policy. My ING Direct’s Electric Orange account has such a policy. There are three different levels of interest an account holder can earn depending on their balance. From $0 to $49,999.99, the interest rate is 0.24% with an APY of 0.025%. From $50,000 to $99.999.99, the interest rate is 1.19% and the APY is 1.20%. The top tier is for balances above $100,000, in which you receive an interest rate of 1.24% and an APY of 1.25%. Each of these rates were posted on March 2, 2010. Unlike many other checking accounts, this one is tied to a money market account which limits the number of withdrawals to 6 per month. Access to your money can be with a MasterCard debit card and at over 35,000 ATM nationwide. There is also free online bill paying with this account.

Highest Yield Checking Account - Danversbank

The best bonus checking account interest rate is presently at 4.01% APY. One financial institution that offers this rate is Danversbank. Their Free Rewards Checking Account has an interest rate of 3.94% with an APY of 4.01%. This requires a minimum deposit of $100 to open and the APY is earned on balances from $0 to $25,000. For balances over $25,000, the APY is 0.025%.

One of the requirements for this APY is not a minimal balance, but 12 debit card transactions are required each billing cycle immaterial of the cycle’s length. The months with holidays are shorter than the typical cycle.

Other requirements are that your monthly statements will only be sent out electronically and you must access your online banking account each billing cycle. The last requirement is that there should be at least one recurring direct deposit each billing cycle.

The advantages of this account are no minimum balance required and no monthly maintenance fee. If you are charged a fee at any ATM nationwide, it will be refunded.

First Security of Iowa

The First Security of Iowa is another financial institution with an APY of 4.01%. This is on their Rewards Checking Account. There is no minimum balance required to receive this APY but it does require $25 to open this account. There is no monthly maintenance fee and no transaction limitations. The debit card is free and checks are printed for a fee. There is also the reimbursement of ATM fees up to $25 per billing cycle.

The requirements to obtain this APY are that 10 points of sale transactions are completed with the debit card each qualification cycle, and the statements are received electronically each month. There must also be a direct deposit made into the account each qualification cycle.

A qualification cycle starts the day before the current billing cycle statement is compiled and ends the day before the next billing cycle ends. The APY is only paid on balances that are below $25,000. For balance above this limit, the APY that will be paid is 1.00%. If for some reason the account holder does not meet each requirement for a given month, the interest rate is dropped to 0.40% APY.

These are three examples of the different requirements and rates a person can encounter in the financial world when looking for a high yield interest checking account. Each one of them is just a little different. When deciding on which one is best for you, look at all the details and qualifications carefully.

If you feel any one of the monthly requirements will not be met, I suggest you look to another financial institution for your account. As of may 2, 2010, there were 4 different financial institutions with an APY of 4.01%. There were four that offered 4.00% APY, and one with an APY of 3.59%.

There are 23 different financial instructions across the nation with APY rates at 3.00% and above, each one with a different set of requirements. The one precaution you should be aware of is that there is a limit of 6 transactions or less a month, this is a money market account.

Always read the fine print for the requirements or all of your time and effort put into acquiring this account will be for nothing.

For more words of wisdom from the financial wizard at The Debt Hawk, please view Investing in a company Vs Investing in Art.

Bank Rates Guide

Hawk — Mon, 25 Jan 2010 14:27:20 +0000

In case some of you haven't noticed, I have added a new page to The Debt Hawk - my Bank Rates Guide. This guide provides a list of the best savings accounts, CD rates and money market rates available.

I write a lot of articles about bank rates both on this site and my other two sites - Best CD Rates Today and Online Banks Blog. This Bank Rates Guide is designed to help people find the best bank accounts at any given time. I will update it monthly to help you stay up to date.

In addition to providing updates on today's best interest rates, I have provided links to other banking articles that I have written, other great online banking resources, and links to the most popular banks.

This guide is not intended to be stagnant. I will keep updating it to make it better and better. If you have any suggestions, I would love to hear about them.

In the meantime, check it out here - Bank Rates.

ING Direct Savings Account Review

Hawk — Sat, 23 Jan 2010 21:31:03 +0000

When I was looking for a high interest savings account over a year ago, the ING Direct Savings Account offered some of the highest interest rates. And, because of that, I opened an ING Orange Savings Account.

Unfortunately, over time the interest rates at ING fell significantly, but I still use them for my online savings account. While the interest rates are not the highest today, I still really like my ING Orange Account.

Savings are a tricky business sometimes, even though most savings accounts are the simplest form of banking available. The trick with savings is knowing not only how much to store in these (usually) variable-interest accounts, but where to go to get the best return on your savings while your money is there.

Of course, banking is a competitive business and a lot of banks have compelling offers. We review those offers and bring you the ones we believe are the best for most situations at any given time. Right now, that seems to be what's found in an ING savings account.

ING Orange Savings Account

The Orange Savings Account, as they call it, often has very high yields; higher than most of the competition. Currently, an ING savings account is showing a 1.25% annual percentage yield (APY). There are no minimums and no fees associated with this either.

To allay any fears, ING Direct savings account and other banking offers are FDIC insured to the fullest extent of the law as ING Direct is separate from the investment arm of this bank.

Opening an ING Orange Savings Account can be done online and the account can be linked to checking for easier transfers. With a 1.25% APY, this account yields higher returns than most other savings options available in standard of even high yield savings nationally.

Ally Bank CD Rates Review

Hawk — Sat, 23 Jan 2010 20:30:02 +0000

When we're looking for the best rates available for savings options, it usually pays off to have a look at Ally Bank CD rates. Most of the time, they are in the top tier of certificate of deposit offerings in the nation. To maximize your safe, stable savings, a CD is often the best choice.

Two current CD rates at Ally Bank worth mentioning right off the bat are the No Penalty CD and the special 12-month term High Yield CD.

The No Penalty CD has a 9 month term with a 1.24% annual percentage yield (APY). This CD can be closed at any time without penalty during its term. While the CD rates are a little lower, the no penalty feature might be worth it.

The High Yield CD offers in Ally CD rates are also very good and the 12 month is a great 1.74% APY offer. Other offers include the 3 month term at 0.99% APY and 6 months at 1.34% APY, some of the best short-term certificate of deposit offers available nationally.

For longer terms, a 2 year offer has 2.15% APY and Ally Bank CD rates for 3 years are 2.49% APY. 4 years gets 2.74% APY and 5 years gets 3.10% APY. These CD rates at Ally Bank are all well above the national average for the terms listed.

All of these offers at Ally require no minimum deposit to open or maintain without fees. Ally Bank is fully FDIC insured and, while these are fixed rates, they can change at any time until you lock them in. So if any of these Ally CD rates appeal to you, lock yours in today.

CD Ladder – How To Build A CD Ladder

Hawk — Mon, 11 Jan 2010 10:28:36 +0000

Build Your CD Ladder

Investing in certificates of deposits can be a great way to earn higher interest rates as compared to savings accounts and money market accounts. This article will teach about my CD ladder strategy.

While you could get higher returns on investment by investing in mutual funds or individual stocks, investing in CDs allows you to protect your principle and lock in interest rates.

Advantages of CD Ladders

CD ladders offer two advantages. First, one drawback to buying CDs is that if interest rates go up after you invest in a certificate of deposit, your money will be locked in at the lower interest rates. CD ladders help you to protect yourself against rising interest rates.

The second advantage to investing in CDs through CD ladders is that CD ladders help you construct your CD portfolio in a way to take advantage of the higher CD interest rates available in longer term CDs, while giving you access to part of your money on a more regular basis.

This article will provide you with what you need to know to develop a great CD ladder strategy.

Certificates of Deposits

Before I get into how to build a CD ladder, I want to make sure to explain the basics of CDs. Certificates of Deposits are bank deposit accounts similar to savings accounts. However, a certificate of deposit has a maturity date and a fixed CD interest rate. Common CD terms are 6 month CDs, 12 month CDs, 24 month CDs, 36 month CDs and 60 month CDs.

CDs typically offer higher interest rates in exchange for agreeing to keep your deposit in the bank for the given CD term. Also, most CDs are FDIC insured. Broker CDs are not FDIC insured, but if you stick to buying typical bank CDs, they are almost always FDIC insured.

When you invest in a CD, your money is locked in during the term of the CD. If you need to use your money to pay for something, you will have to pay a penalty to liquidate the certificate of deposit before the expiration of its term.

While locking in your CD interest rate for the term of the CD allows you to know with certainty how much interest you will earn, if CD rates go up during the term of your certificate of deposit, you will be stuck with your lower rate. This risk is why CD ladders are a great way to invest in CDs.

CD Ladder

As mentioned above, the reason to build a CD ladder is to protect yourself if CD rates go up. A common stock investing strategy is dollar cost averaging and I think that this is a great analogy for CD laddering. With dollar cost averaging, you purchase stocks a little at a time on a regular basis. This helps protect your money in the event that the stock price falls after your initial purchase. This is the same with building a CD ladder, except with a CD ladder you are protecting yourself from buying a CD a CD rate too low.

CD ladders help protect you from the lost opportunity of buying CDs in the future with higher CD rates. How a CD ladder protects you is that with a CD ladder you can deposit your money in various CDs (initially all having various length terms), and once your CD ladder is established all of your money will be in the longest term CDs which presumably have the highest CD rates. But, once your CD ladder is built, the best part is that every year one of your CDs will mature and you will have access to your money to either purchase another CD or to invest it in some other manner.

How To Build A CD Ladder

For this example, lets assume that you want to build a 3 year CD ladder using $15,000 of savings.

To begin building the CD ladder you would buy 3 CDs at $5000 each - $5000 in a 1 year CD, $5000 in a 2 year CD, and $5000 in a 3 year CD. Now, every year one $5000 CD with mature allowing you to reinvest that $5000 in another CD. However, now you can buy a 3 year CD every time a CD matures. And, after two years, all of your $5000 will be invested at the higher CD rates offered by 3 year CDs. However, because a new CD will be maturing every year, at the end of the two year period, you will also have access to $5000 every year.

This same process can be used for any given maturity term you are going for. If you wanted a 5 year CD ladder, you would initially deposit equal sums into a 1 year CD, 2 year CD, 3 year CD, 4 year CD and 5 year CD.

I hope that this article will help you to save money smarter. Do you have a CD ladder? If so, please share how you built your CD ladder.

Citibank CD Rates – Investing in CDs

Hawk — Fri, 08 Jan 2010 11:32:53 +0000

Here on The Debt Hawk, I love to talk about getting out of debt. But, today, I want to look at something a little different. I want to talk about savings.

The other end of the debt equation is saving money for the future and one of the best ways to do that is by investing in CDs.

I'm going to focus on how a Citibank CD can be used to save money for the next year, three years, five year, or even further out. I chose Citibank CD rates not because they are the best (they aren't typically the best CD rates), but because it's a large, national bank that a lot of people bank with.

What is a CD?

A certificate of deposit account is a savings account in which you “lock away” money for a specified amount of time (the term of the CD) and in return, the bank gives you a guaranteed percentage rate for that term. This means that while you can't withdraw the money early without incurring penalties, the bank is guaranteeing a given interest rate no matter how the market fluctuates.

Citibank Certificates of Deposits

Most CD rates at Citibank are based on how long the term of deposit lasts for. For instance, a five year term has a 2.50% annual percentage yield (APY). That yield is guaranteed for the full five years of the certificate.

Banks like certificates of deposits because they are guaranteed money (deposits) on their books for a specific amount of time. Customers like the CD because it has a guaranteed rate of return and is FDIC insured.

To get Citibank CD rates, a minimum deposit of $500 is required to open and maintain the account. Assuming that is what you start with, after five years, that $500 at 2.50% APY means that, compounded monthly, your total after five years would be $552.54. Not much, but you started small.

Now consider what you could do with that if you have $5,000, $10,000 or more to deposit. This is why CD accounts are so popular amongst investors. They are used as a guaranteed baseline for many investments, planned events (weddings, college, etc.) and more. Farmers even use them to deposit money in the fall to purchase seeds in the spring. Basically, CDs are great for any short term savings or savings for a defined purpose.

Over the next few days, I'll be talking about savings and what types of savings accounts work for what situation. A certificate of deposit, as outlined here, is a great way to save money to get a much higher return than is possible with most other savings account types.

Largest US Banks

Hawk — Thu, 07 Jan 2010 11:05:14 +0000

The Federal Reserve publishes a quarterly list of the top 50 largest US banks, ranked by deposits and assets. Several groups, including the Investigative Reporting Workshop at American University, take that list and compare banks using other criteria, such as troubled assets.

This can give a great indication to the banking customer, investor, etc. as to how well a bank is performing and whether there is need to worry about the safety of deposits. If you have a $100,000 certificate of deposit or IRA deposit at a bank, you'd like to know it will be safe in its growth.

Top 10 Largest US Banks

Using the two lists, let's look at the top ten biggest US banks and then at their percentage (ratio) of troubled assets versus their deposits on hand.

The top ten banks by deposit are:

1. Bank of America Corp

2. JPMorgan Chase & Co

3. Citigroup Inc

4. Wells Fargo & Co

5. HSBC North America Holdings

6. US Bancorp

7. SunTrust Banks

8. Capital One Financial

9.BB&T Corp

10.State Street Corp

I removed the financial holdings corps that do not run banks, such as MetLife and Tannus, and kept only the actual banks for the biggest US banks list. That is to tie in with the information below.

Banks With Largest Percentage of Troubled Assets

1.Citicorp (44.2)

2.SunTrust Bank (41.2)

3.National City (40.3)

4.Wachovia Bank (40.3)

5.Compass (36.0)

6.Regions (33.3)

7.Bank of America (32.6)

8.Sovereign (32.0)

9.JPMorgan Chase (31.0)

10.Wells Fargo (11.1)

Although it shouldn't be on the list, I included Wells Fargo because they are the new owner of Wachovia, though their assets have not been entirely combined as of yet. Much of the Wachovia number will be sold off when bankruptcy completes, so the entire 40.3% will not be absorbed into Wells Fargo, which is otherwise doing well compared to its peers.

Comparing the two lists, you can see that the largest banks often lead the way in troubled assets too. Big does not mean safe unless you believe in the “too big to fail” joke that is oft repeated.

Every bank has troubled assets, of course. It's the nature of the business. It's how those assets are managed and whether you're comfortable investing in a bank with a large ratio of them that is the moral of this story.

Do you bank with any of these banks? If so, please share in the comments your experiences with that bank? Would you recommend them to your friends?

Top 5 Checking Accounts

Hawk — Tue, 15 Dec 2009 11:28:41 +0000

Almost all of us have a checking account, but I bet a lot of us earn extremely low interest rates on these accounts. You don't have to put up with a low interest checking account. Check out the top 5 checking accounts before you commit to put your on-demand cash in any bank. There are some banking institutions that do offer higher interest rates than others but of course high interest is relative.

Be sure you understand exactly all the fees involved with a high interest checking account. Fees can eat into interest earnings. Online banks often offer the highest interest-checking rates.

Top 5 Checking Accounts

Rates as of 12/15/09

Chesapeake Bank Clear Sky Checking has an interest rate of 1.44% with an APY of 1.45% for account balances $9,999.99 and below. For balances of $10,000 to $24,999, the interest rate is 1.54% with an APY of 1.55%. For balances of $25,000 to $249,999, the interest rate is 1.64% with an APY of 1.65%. For balances of $250,000 and above, the interest rate is 0.50% with an APY of 0.50%.

ING Direct’s Electric Orange Checking Account has an interest rate of 0.24% with an APY of 0.25% for account balances of under $49,999.99. For account balances of $50,000 to $99,999.99, the interest rate is 1.48% with an APY of 1.50%. For account balances of $100,000 or more, the interest rate is 1.53% with an APY of 1.55%. While these checking account interest rates are not that high, I wanted to list ING's rates because a lot of us have ING savings accounts.

EverBank’s FreeNet Checking Account has a bonus rate offer of 2.51% APY for the first 3 months. The minimum opening balance is $1,500. The rate then becomes 1.20% APY for the first year for account balances under $10,000. APYs are higher for higher account balances. Customer service is 24/7 and has unlimited check writing.

Acacia Federal Savings Bank’s Top Choice Checking Account has an interest rate of 1.49% with an APY of 1.50% for a minimum balance of $5,000.

State Farm Bank’s Interest Checking Account has an interest rate of 1.34% with an APY of 1.35% for an account balance of $2,500 and above. Minimum opening deposit is $100.

To round up your information to come up with your top 5 checking accounts, check out rates from your local credit unions as well. Credit Unions can have some of the highest rates for local banks.

Please note that checking account rates are subject to change and you need to visit the bank's website to make sure you know the current interest rates. Take a look at these top 5 checking accounts and start earning some interest.

Best Money Market Rates December 2009

Hawk — Sat, 12 Dec 2009 23:40:26 +0000

Money market accounts are a great way to earn more interest on your money over traditional checking accounts. To find the best money market rates December 2009 you must stay on top of what is happening on a weekly basis, if not daily.

EverBank still holds the lead on interest rates for a money market account with an introductory offer of 2.51% for their APT, but drops after 3 months to 1.77% for balances under $50,000. This rate was posted on 12/04/09 and was still current as of 12/09/09. The people at EverBank have made a pledge to keep their interest in the top 5 % of competitiveness of all leading banks in the nation. So far, they have kept their pledge.

There is a Mega Money Market account that is disguised as a checking account from Redneck Bank. The APY of this account is 2.00% and is calculated daily. It is called a checking account but the 6 withdraw limit is still in place as set by the US government. This APY is available to all balances up to $35,000.

Discover Bank offers an APY of 1.75% but your balance must be over $100,000, so I will move on because for balances under $10,000, the APY is only 1.09%.

The Colorado Federal Savings Bank offers an interest rate of 1.69% with an APY of 1.70% on deposits of $2,500. This is available for money market accounts that are opened online. The APY was posted on 12/03/09 and was current as of 12/09/09.

From the Bank of the Internet out of San Diego, CA comes the interest rate of 1.540% with an APY of 1.550% on any deposit between $1 to over $100,000. The opening minimum deposit must be at least $100 and the rates were current as of 12/09/09. The main reason this bank states it can offer and sustain these higher than average rates is the reduced overhead of being an online bank.

I hope that this article helps you to find the best Money Market Rates December 2009. Money market rates are all subject to change so check with the financial institution of your choice to confirm all rates.

Wells Fargo Online Banking

Hawk — Sun, 08 Nov 2009 12:48:31 +0000

I have been writing a lot of posts over the last two weeks about online banking. I have been reviewing the online banking options provided by some of the largest banks in the United States. Today, I am reviewing Wells Fargo online banking.

The grand adventure of the overland stagecoach line continues with Wells Fargo Online Banking. Henry Wells and William Fargo sent their business by the fastest possible means of their day: stagecoach, steamship, railroad, pony rider, or telegraph. Today, thanks to the internet, Wells Fargo’s virtual stagecoach is still running full throttle with Wells Fargo Online.

Wells Fargo Online

The homepage layout is simple but upbeat through the use of simple fonts and graphics, and just a little hint of vibrancy with a dash of color. Banking sections and information such as the login/sign up section, account services, or ATM locator cannot be missed on the homepage because of the columnar arrangement of the services links. Depending on the speed of your internet access, the Wells Fargo Online links take you immediately to the section of your concern whether to monitor your account, manage your finances, pay your bills, access your personal online safe, or if you need to contact customer service.To check on information regarding savings accounts, CDs, or money market accounts you would need to fill out the particular state where you are located to access the information relevant for you.

Wells Fargo Savings

For starter savers, Wells Fargo Goal Savings is a great way to start saving and is the bank’s most popular account. You can open this account with just $100 as minimum opening deposit or for only $25 if you set up automatic transfers.

Wells Fargo Money Market

If you want competitive rates and easy access to your money with an option to write checks, you can open a Wells Fargo Money Market Savings for a minimum opening deposit of $100. For a minimum opening deposit of $25,000, you can open a Wells Fargo High Yield Savings should you prefer premium rates, easy access to your money, and option to write checks.

Wells Fargo CDs

If you have the flexibility to deposit your money for a longer period of time, Wells Fargo CDs currently have special rates for a minimum deposit of $5,000. Otherwise, minimum opening deposit for Wells Fargo Standard CDs is only $2,500.

You can learn more when you visit the Wells Fargo Online Banking webpage.